Question

Foxmoor Company applies manufacturing overhead by using a predetermined rate of 50% of direct labor cost. The data that follow pertain to job no. 764:

Direct material cost $55,000
Direct labor cost 80,000

If Foxmoor adds a 40% markup on total cost to generate a profit, which of the following choices depicts a portion of the accounting needed to record the sale of job no. 764?

Account Debited Amount
A. Cost of Goods Sold $175,000
B. Cost of Goods Sold $245,000
C. Finished Goods Inventory $175,000
D. Finished Goods Inventory $245,000
E. Sales Reveune $245,000

a. Choice A
b. Choice B
c. Choice C
d. Choice D
e. Choice E

Answer 1

e. Choice E

Step-by-step explanation:

Total cost of job no. 764 = $55,000 + $80,000 + 80,000 x 50%

= $175,000

Total Revenue for job no. 764 = $175,000 + $175,000 x 40%

= $245,000

E. Sales Revenue $245,000